Walmart acquires Flipkart for $16 Billion!

Allegations are now no longer just allegations, a long time talk on the Walmart-Flipkart deal is over now; yes! The deal between Walmart and Flipkart has been sealed.
On Wednesday, Walmart acquired Flipkart for $16 billion; it is the world’s largest ecommerce deal and the US retail giant has acquired 77% of the Sachin and Binny Bansal Company. 11 year old company Flipkart is now valued at $20 Billion.

Walmart acquires Flipkart for $16 Billion!

Wednesday, 9th of May, 2018

Allegations are now no longer just allegations, a long time talk on the Walmart-Flipkart deal is over now; yes! The deal between Walmart and Flipkart has been sealed.

On Wednesday, Walmart acquired Flipkart for $16 billion; it is the world’s largest ecommerce deal and the US retail giant has acquired 77% of the Sachin and Binny Bansal Company. 11 year old company Flipkart is now valued at $20 Billion.

Sachin Bansal, who had co-founded Flipkart with Binny Bansal in 2007, would exit the company after the deal. Japan's Softbank, an investor, will also exit the company by selling its entire 20 per cent stake in Flipkart. Sachin and Binny, who are not related and formerly worked for Amazon, The remainder of the business will be held by existing investors, including Flipkart's co-founder Binny Bansal, Tencent, Tiger Global and Microsoft.

The talks of the merger began in late 2016 when Walmart was planning to buy a minority stake in Flipkart, and it is the largest buyout for the US Company with its biggest bet ever in online space and on India, underscoring the growing digital consumption potential in a country of 1.3 billion.

“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market,” said Doug McMillon, Walmart’s president and CEO

McMillon added that the company is also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners.

“We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.”

Morgan Stanley has estimated that Flipkart’s worth will grow to $200 billion in about a decade. But it will take some time for the business to turn profitable.

Walmart shares fell down 4.2 percent in U.S. premarket trade on Wednesday following the announcement; the shares dropped as much as 4.2 percent to $82.12 as of 10:28 a.m. in New York.

Flipkart has 100 million users signed up to its platform, according to the company's website. India, which has a population of 1.3 billion, is seeing rapid growth in its digital economy with the emergence of e-commerce start-ups like Snapdeal and Paytm.

India's first billion-dollar e-commerce company, Flipkart, sells 8 million products across 80-plus categories. Flipkart started as an online bookstore 11 years ago in 2007. Founded by IIT Delhi alumni Sachin and Binny Bansal, Flipkart's first workplace was a 2BHK apartment in Bengaluru. In the early days, the two Co-founders used to deliver books across Bengaluru on their scooters.